According to the 1960s cartoon sitcom “The Jetsons,” George Jetson was born last year. Set less than 40 years from today, the show imagined a world filled with flying cars, houses set amidst the clouds and three-day workweeks. Given the rate at which U.S. economic growth is slowing, that future looks increasingly far away — but the speed at which the future arrives is up to us.
From 1950 through 2000, the U.S. economy averaged about 3.5 percent growth per year, meaning the total amount of goods and services produced doubled every 20 years. But over the last two decades, our growth rate has dropped by more than half.
What about the robust economic recovery from COVID-19 and the lowest unemployment rate in 50 years? Yes, these things are good, but they don’t account for what we’re missing out on. Nearly every living American is better off than the richest person 100 years ago. Rockefeller, Louis XIV and Ramesses II probably thought they were living the best lives possible, but none had Netflix, air conditioning or antibiotics.
Similarly, future generations will be better off than we are. But we don’t have to let our kids have all the fun. We can accelerate the future’s arrival to enjoy tomorrow, today. The privatization of the internet barely 30 years ago showed just how much is possible when innovators are given room to run.
Replicating that success requires embracing the “Abundance Agenda” — a solution to our self-imposed scarcity. Success requires recognizing that our decelerating quality of life is the result of policies that implicitly suppress innovation.
Much of the reduction in economic growth seems connected to the accumulation of regulations. My colleague Patrick McLaughlin and others have shown a clear connection between the two, suggesting that as impressive as our economy is, it’s half the size that it otherwise might have been.
Get ready for sticker shock: Median household income today could be $150,000, rather than $70,000. During the “Great Enrichment” of the last 200 years, rapid economic growth drastically alleviated poverty, but we’ve taken our eye off that ball.
This isn’t a call to deregulate everything. We should start with the low-hanging fruit: regulations created by corporate cronyism or unnecessary paternalism.
Think about the Food and Drug Administration’s (FDA) historical reluctance to allow medical innovators to develop home tests that give us information about our own health. If we can be trusted with self-administered COVID-19 tests, why did the FDA oppose at-home pregnancy tests and individual HIV tests? And why won’t they approve flu and respiratory virus tests that are widely available elsewhere?
Unrestrained innovation offers almost endless potential. Canadian researchers recently partnered with a drone developer to quickly transport a lung transplant to a desperate patient. (Lung cells start dying within 20 minutes of leaving the body.) Japan approved a tomato that helps relieve hypertension via increased levels of natural blood pressure-fighting nutrients. Encouraging similar medical advancements will increase quality of life and lower health-care costs.
Closer to home, the housing affordability crisis is the result of a million miniature policies designed to restrict local development, no matter how sensible or environmentally friendly. Housing costs are critical because they’re most families’ largest expenditure. Some research even links our economic slowdown with local housing policies that stifle national productivity.
Housing is tied to schooling, and as my colleague Salim Furth has said, “Getting into a good school district is more like joining a country club than like registering to vote.” Diversifying schooling options would allow families to choose more affordable homes, tailor educational development to each child and promote faster economic growth.
A better-educated U.S. workforce will compete more effectively in the world economy, and trade is critical to accelerating the future. Exports and imports are reciprocal — you can’t buy more imports without sufficient exports, and your trade partners won’t buy more of those without cash from U.S. imports. Innovation matters far less if we can’t capitalize on it through trade.
Abundance even lessens our growing federal deficit. Rising entitlement costs will soon double our national debt. A gridlocked Congress is unlikely to raise taxes or decrease benefits sufficient to solve this. But if we unshackle our economic engine, we might have a chance of growing fast enough that rising tax revenue can mitigate the problem. Furthermore, rising incomes will lead to entitlement programs being less critical than they are now.
Humans are hesitant about rapid economic change. We need to address their fears with compassion. But a more abundant society will benefit both skeptics and pioneers. The Abundance Agenda is about growing the economic pie so that everyone gets a bigger slice.
Today we have video calls, simplified versions of Rosie the housecleaning robot and amazing convenience items. But if we want the Jetsons’ three-day workweeks, we have to unleash the innovators.
Michael Farren is a senior research fellow with the Mercatus Center at George Mason University.